Charles Stanley shares soar as firm almost doubles reported profits and unveils new profit-focused pay scheme

Hayley Kirton
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The firm is finally back in the money (Source: Getty)

Charles Stanley today revealed it has nearly doubled its profits during the six months to September and unveiled a long-awaited new pay structure, as shares soared by double digits.

The figures

The investment manager reported profit before tax of £3.6m, up 80 per cent from £2m for the same period the year before.

However, revenue slumped slightly to £68.8m, down eight per cent from £74.9m last year.

Meanwhile, funds under management and administration increased to £22.5bn, up 13 per cent from £20bn at the end of September last year.

The 300-year-old firm, which has recently moved to a new headquarters on Bishopsgate, maintained its half year dividend at 1.5 pence per share.

Shares in the company are currently up 17.7 per cent at 315p.

Charles Stanley Charles Stanley | mobile image

Why it's important

The investment firm has been desperately clawing itself back to profitability after a rough few years – the company revealed it was £6m in the red in its full-year results for 2015.

Although the company has been gradually edging back into the black, the shakeups are not completely done yet. Today, Charles Stanley revealed that, after a two-year consultation on the matter, it would be introducing a new pay structure from the start of its next financial year, which will focus more on rewarding staff based on profit contribution than revenue.

Looking forward, the company noted it was "cautiously optimistic" for 2017, adding June's Brexit vote had not hampered the financial market in the way many commentators had feared and Donald Trump's recent triumph at the US elections was likely to bring more positives to the markets.

What Charles Stanley said

Noting he was pleased his company had been able to "maintain the momentum of the turnaround strategy", Paul Abberley, chief executive of Charles Stanley, told City A.M. the new pay plan would, among other things, "much improve the alignment between the interests of the investment managers and the interests of the company and its shareholders, and that alignment then in turn brings much better teamwork and a much more effective company going forward".

On President-elect Trump, Abberley said his campaign promises hinting at a "rotation to using fiscal policy more expansively", as opposed to endless fiddling with interest rates, would help to boost both the US and the global economies and would ultimately be good for equities.

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